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Wyden seeks bipartisan bill on tax inversions

Bipartisan congressional legislation aimed at addressing a surge of U.S. firms trying to cut their taxes by reincorporating overseas could be introduced in September, a ranking Senate Democrat said Thursday.

Bipartisan congressional legislation aimed at addressing a surge of U.S. firms trying to cut their taxes by reincorporating overseas could be introduced in September, a ranking Senate Democrat said Thursday.

Sen. Ron Wyden, D-Ore., chairman of the Senate Committee on Finance, made the prediction while saying he's working with Sen. Orrin Hatch, R-Utah, the panel's ranking minority member, to address company departures that could erode the federal government's tax base.

Wyden said he's also consulted with Sen. Charles Schumer, D-N.Y., who on Thursday issued a proposal aimed at limiting tax deductions for domestic firms that shift their headquarters to lower-tax nations while continuing much of their business operations in the U.S.

The limits would make it harder for companies that undergo inversions to saddle their U.S. operations with debt, thereby reducing their U.S. taxable income. The tactic, known as earnings stripping, "is a key piece of any sound solution" to the overall inversion issue, said Wyden.

"This issue demands a resolution in the near term and I hope to have bipartisan legislation in place come September," Wyden said.

Despite the flurry of statements, it's unclear whether any final agreement will emerge on the inversion issue that's divided congressional Republicans and Democrats when Congress returns to session next month after a summer recess.

The comments come amid a surge in which 47 U.S. companies sought to lower their tax bills by reincorporating overseas during the last 10 years, according to the Congressional Research Service. Roughly a dozen more are researching or pursuing inversions, including Minnesota-based medical technology giant Medtronic.

Illinois-based Walgreens earlier this month announced it would not reincorporate its headquarters in Switzerland. The decision by the nation's largest drugstore chain came after President Obama said U.S. firms that seek tax savings via inversions are "gaming the system."